‘Ding!’ goes the notification on your phone. You glance over in anticipation, hoping it’s the SMS informing you that your salary has been paid. Already, you’ve planned what you’re going to do with your money – after all, that’s what your budget is for.
According to your calculations, your expenses will be covered by your salary, with money left over for some savings and fun, too. So why then do you have yourself pinching pennies in the middle of the month, wondering to yourself where all your money and meticulous planning went to?
A lack of financial discipline is perhaps the most ruinous path to money problems. Having the wherewithal to plan ahead and not doing it is irresponsible. So, if you’re serious about curbing your spending, it’s time to change your financial mannerisms and adopt a new monetary lifestyle.
The most important thing you can do here is lay out your dreams and goals in front of you. It could be anything – a dream wedding, a cushy retirement fund, or even a fabulous overseas holiday. Understand that without saving and financial sacrifice, it’s very unlikely that those dreams will come true. Putting your goals in front of you will give you something to work towards and an incentive to stay on the straight and narrow.
Secondly, take care of all your expenses before you spend. Knowing that you have money in your account may cause you to spend more frivolously. However, taking care of your rent, car payment and other monthly bills first will give you a more realistic figure of what you actually have to play with. Many people (particularly younger people) then take on credit card debt to balance their finances out, which is detrimental.
Another trick people use to curb their spending is what’s known as the three-day rule. When you have the desire to buy a big-ticket item – such as an expensive pair of shoes, electronic device, or fancy clothing – wait three days to see if you truly want and desire the item. Once the impulsive desire for that object goes away, you will be able to see whether you really want that object or not. This trick also allows you to think about the purchase – and teaches patience, too.
While a lot of us do this simply because we’re busy, eating out and buying take-out becomes expensive. Yes, it’s more convenient – especially if you have a demanding job that allows little time for cooking. But if you can’t commit to packing your lunch daily or cooking dinner, try to do so a few times a week. This will drastically reduce your spending and save you plenty of money in the long run. Think of it this way – if you spend R50 a day on lunch, that equates to R1,000 a month. Overall, you’re spending R12,000 a year on lunch.
Another way to reduce your spending is to take a lifestyle cut. People often wonder how they’re going to make it to the end of the month or save any money, but they have a cleaning service that tidies their homes or several streaming services. While it’s understandable that for some a cleaning service is a need – there are single parents who work full-time jobs, for example – for many people, it isn’t. This is just an example of something that can be cut, though. Instead of paying someone else to clean your house or straighten up your garden, try to do it yourself.
Finally, and this is a big one, hide your credit cards away. If that doesn’t work, give them to a trusted family member or friend so that the temptation to spend on credit isn’t there. Credit card debt throws many people off the path to financial freedom – don’t let it be you.
Have a question about share investing? Write to me at [email protected].
Read more:
- Time to rethink that budget? – On the Money with Jarryd Neves
- Wanting to emigrate? Here’s what you need to consider – On the Money with Jarryd Neves
- Improving your credit score – On the Money with Jarryd Neves
